Economic Indicators Interest Rates GDP Growth Fuel Costs. Housing & Commercial Growth Building Permits Home Values Top Taxpayer Meetings

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1 TRANSMITTAL LETTER The Transmittal Letter is written to the City Council by the City Manager and provides a high-level preview of the City Manager s proposed budget. It contains information including the proposed tax rate and proposed fund summaries as well as overviews of the departmental business plans. The letter helps tie together the core elements which make up the proposed budget and illustrates how those elements further the City s goals found within the strategic management system. 11

2 Budget Goals August 15, 2012 Honorable Mayor and Members of City Council 1400 Main Street, Suite 460 Southlake, Texas Dear Mayor and Members of the City Council: In accordance with the Texas Local Government Code and the Charter of the City of Southlake, the proposed annual budget for the fiscal year beginning October 1, 2012 and ending September 30, 2013, is submitted for your consideration. The budget, as filed with the City Secretary, presents in summary form the revenues and expenditures for each of the funds. The budget will be discussed with City Council in a series of work sessions and will be presented formally at public hearings in September. The FY 2013 Proposed Budget is structurally balanced and supports sound fiscal and operational policies. It is a strategic budget that aligns financial and employee resources with the City of Southlake Strategy Map. It provides for investments in safety, mobility, infrastructure, high performance management, quality development and recognizes that volunteers and partnerships are important to excellent service delivery. Budget Goals The budget has been developed with a clear set of goals. These goals were identified to ensure that the FY 2013 budget meets today s needs and positions the City of Southlake for a positive financial future. The first goal was to develop a financial plan to support the City s strategic priorities and ensure high quality service delivery. City Council has set a very clear vision supported by a set of priorities, known as strategic focus areas. These high level priorities define the business of the City. It is important that resource allocation be aligned with these priorities, and that departmental business plans are structured to ensure that critical business outcomes are achieved. Figure 1 (opposite) is the City of Southlake Strategy Map, which details Council s focus areas, objectives, critical business outcomes and values. Economic Indicators Interest Rates GDP Growth Fuel Costs Labor & Employment Wages Unemployment Health care costs It is also essential to build a budget around strong financial principles. To this end, economic analyses, multi-year planning and strong policies have been an integral part of the process. Figure 2 (right) shows the approach used to gather local economic information to use when projecting revenues for the budget. The data gathered from these sources are shocked to develop best, medium and worst-case financial scenarios for stronger current budget decisions. We also recognize that today s decisions impact 12 Housing & Commercial Growth Building Permits Home Values Top Taxpayer Meetings Consumer Spending Retail Sales Projections Figure 2: Economic information used for City financial projections

3 Budget Goals Figure 1: City of Southlake Strategy Map tomorrow s budgets. The focus has also been to develop a spending plan that is attentive to tax rate management. Using a target budgeting method we have minimized incremental increases and highlighted new initiatives for evaluation. The budget meets the goal of structural balance and reserves are at optimal levels. The operational impact of projects and programs have been identified and incorporated into the budget and a multi-year analysis has been completed to confirm the sustainability of the budget over time. All of this helps us achieve a set of predetermined financial goals with this budget. Trends that depict the long-term financial health of the City are reviewed as a part of the budget process, and are used to determine if budget decisions positively or negatively affect the City s financial position. One of the goals for the budget is to anticipate and make deliberate decisions to reach financial and service goals. These trends are graphed and provided as part of this budget s support materials to provide a deeper understanding of the City s overall financial condition. DID YOU KNOW? The FY 2013 Proposed Budget is structurally balanced - meaning that reserves have not been used to balance the operating budget. 13

4 City of Southlake Organizational Chart Southlake Citizens Transmittal Letter Service Delivery Excellence Mayor and City Council City Attorney City Manager City Secretary Asst. City Manager / DPS Director Municipal Judge Asst. City Manager Community Services Economic Development City Manager s Office Information Technology Department of Public Safety Human Resources Finance Police Fire Planning & Development Services Public Works 14 Figure 3: City of Southlake s organizational structure

5 Service Delivery Excellence Service Delivery Excellence The City is committed to providing Southlake taxpayers high quality, high value public service. The objectives planned with this budget will be carried out through the traditional departments as well as through Focus Area Cabinets, described below. Figure 3 (left) is the City of Southlake s traditional organizational chart, showing the departments and reporting structure. Each department director is responsible for the day-to-day operations of their respective work units and for achieving planned outcomes identified in their departmental business plans Focus Area Cabinets Safety & Security Mobility & Infrastructure Quality Development Partnerships Volunteerism Performance Management & Service Delivery Core Values Strategy execution is a fundamental part of day-to-day operations within the City of Southlake. The executive team regularly reviews progress toward meeting performance targets, including assessments of key accountability indicators (performance measures) and success in addressing Council-identified critical business outcomes. Each department has a performance scorecard that provides the focus for work plans and a way to assess the quality of the work being performed. Attention is given to what needs to be done, but performance is also about how things are done. In Southlake the City s core values define the expectation. The values are integrity, innovation, accountability, commitment to excellence, and teamwork. Another key component of the City s strategic management system is the use of interdepartmental employee teams that have been organized into Focus Area Cabinets. Members of the Focus Area Cabinets act as stewards of the City s strategic focus areas and core values. These self-directed work groups provide leadership oversight on the execution of plans, report progress towards goals, address issues and communicate success stories. In short, the cabinets provide a level of oversight and motivation toward addressing these priorities so important to the City s success. The City is also mindful of the need to protect the ability to provide excellent services in the future. Accordingly, the City analyzes the operational impact of today s initiatives on future budgets. This allows us to develop plans for financially sustaining the budget in out-years. By understanding future personnel and operating costs of capital improvements, for example, we are able to effectively plan to meet those budgetary requirements. Additionally, Southlake 2030, the City s comprehensive plan, identifies future projects and provides a good mechanism for anticipating future budget impacts. The City is also planning to complete a Sustainability Plan as part of the Southlake 2030 process which will ultimately serve as a multi-year financial plan that will be updated not only annually, but also during each future comprehensive plan update. 15

6 Financial Information & Fund Summaries - General Fund Financial Information and Fund Summaries The City s budget is comprised of several funds to account for the revenues and expenditures that support the City s operations. Some funds are supported by property tax and other tax revenues, while others are supported by fees that cover the cost of the service. Certain funds are restricted in their use, while others provide more flexibility. This letter has been organized to describe each fund and highlight key aspects of the budget for each. General Fund The General Fund is the City s principle operating fund, which is supported by property and sales taxes, fees and other revenues that may be used for a variety of purposes. This fund accounts for core City functions such as police, fire, engineering, planning, finance and administrative operations. Tax rate. The proposed budget for FY 2013 incorporates a tax rate of $0.462 per $100 valuation, which holds the tax rate steady for the tenth consecutive fiscal year. For the coming fiscal year, a homestead exemption of $15,000 is proposed to complement the current over-65 exemption ($75,000) and disabled exemption ($75,000), as well as the over-65 tax freeze. The tax rate of $0.462 is split between general fund operations and debt service. This budget proposes to reallocate the tax rate by moving one cent from the debt service tax rate to the general fund operations tax rate. This will result in an allocation of $0.342 for general operations and $0.12 for debt service. This reallocation is proposed because the City s debt requirements have lessened as we move toward build out, but the operational impacts of new facilities and programs are being realized this year and as a part of our multi-year financial analysis. Since 2002 long-term debt as a percentage of valuation has declined from 3.29% to 1.37%. This has been accomplished by using cash for certain capital projects rather than financing them through bonds. Figure 4 (below) shows trend information for Southlake s debt as a percent of assessed valuation. The City has used many tools to reduce its debt service requirements. Examples include debt refunding when appropriate and shortening the amortization schedule for certain issuances. Debt management strategies have resulted in a debt profile showing almost 70% of the City s current debt paid off within ten years. Taxable value. Figure 5 (top right) shows the change in taxable value from FY 2012 and documents the impact of new construction on the values. (Note 16 Figure 4: Long-term Debt as a Percentage of Assessed Valuation

7 Financial Information & Fund Summaries - General Fund that the value shown in the table is net of the incremental taxable value assigned to Tax Increment Reinvestment Zone #1. For FY 2013, TIRZ #1 taxable value is $290,288,209.) Figure 6 (middle right) demonstrates the growth of Southlake s property values over time. The difference between assessed value and taxable value is primarily due to exemptions. Fiscal Year Value Taxable Value Comparison FY FY 2013 % Increase Prior Year New Construction New Construction as % of Total 2012 $5,290,518, % $55,114, % 2013 $5,452,457, % $73,447, % Figure 5: This chart compares taxable property values for FY 2012 with those for FY State law requires a taxing unit to calculate two rates after receiving its certified appraisal roll -- the effective tax rate and the rollback tax rate. The effective tax rate is the rate that will generate the same amount of property tax dollars as the previous year, excluding new construction and annexations, when the two years are compared. The rollback tax rate is the highest tax rate the taxing unit can set before taxpayers can start tax rollback procedures. Depending on the ultimate tax rate that is chosen by the City and its relationship to the effective tax rate, there are requirements that must be followed to comply with state truthin-taxation laws. These requirements protect the public s right-to-know concerning tax rate decisions. Figure 7 (bottom right) compares the tax rate, effective tax rate, and rollback rates for FY 2012 and FY As shown in the table, the calculated effective tax rate is lower for FY 2013 than for FY Figure 6: Comparison of property values since FY 2009 (assessed and taxable) Revenue highlights. The proposed FY 2013 Annual Budget projects $34,240,825 in General Fund revenues, which is an increase of $2,265,363 or 7.1% from the FY 2012 Adopted Budget. Tax Rate Comparison The largest single revenue source in the proposed budget is the ad valorem (property) tax. The proposed budget will provide $18,305,319 in ad valorem tax dollars for the General Fund operations budget, an estimated Fiscal Year Tax Rate Effective Tax Rate Rollback Rate 2012 $0.462 $ $ $0.462 $ $ Figure 7: Comparison of tax rate, effective tax rate, and rollback rate. 17

8 Financial Information & Fund Summaries - General Fund increase of $872,089 (5%) from the FY 2012 Adopted Budget. A portion of this increase is attributable to increased value and new construction added value of $73,447,998. Of course, the additional penny due to the tax rate allocation adjustment contributes to the increase in revenue for the operating fund as well ($530,000). Figure 8: Sales Tax Collection Trend when compared to last year s adopted budget. * Amended **Proposed The second largest projected General Fund revenue source in the FY 2013 Proposed Budget is the municipal sales tax. The proposed budget forecasts revenue from this line item to increase 13.2% The sales tax collections have been rebounding over the past few years, as shown in Figure 8 (above). We are expecting to collect $9,190,000 in the General Fund for FY The other major revenue sources for the General Fund are franchise fees ($2,704,856) from the private utility companies operating in the City and municipal fines ($915,000). Budget projections show franchise fees remaining relatively flat for FY 2013, but reflect a decrease in the projected revenue from citations. Figure 9: General Fund Revenue by Source Another large revenue source in the proposed General Fund budget is derived from the municipal permits and fees charged for various development activities, such as fees for zoning, platting and building permits. The proposed budget projects revenues of $1,117,300 from this source in FY This represents an increase of $362,500 or 48% over the projection included in the FY 2012 Adopted Budget. The City is projecting that 65 single family residential building permits will be issued during 18

9 Financial Information & Fund Summaries - General Fund FY 2013, which is comparable to FY 2012 projections. Revenue from commercial permits is expected to decrease. Charges for services are estimated at $1,162,850, which is an increase from the FY 2012 Adopted Budget. This category of revenue includes interlocal contributions from the cities of Grapevine, Colleyville and Keller for the joint Teen Court program ($110,250). Miscellaneous income is projected at $775,500, a decrease of $83,570 or 9.7% below last year s adopted budget. The proposed budget reflects $70,000 in interest earnings. As previously mentioned, total General Fund revenue projected for FY 2013 represents a 7.1% increase ($2,265,363) from the FY 2012 Adopted Budget, including $530,000 realized from the tax rate reallocation and recognizing the $15,000 homestead exemption proposed for this fiscal year. Figure 9 (previous page) shows the distribution of General Fund revenue sources. The General Fund also recognizes $1,324,541 in revenue that will be transferred from the Utility Fund, Storm Water Utility Fund, Hotel Occupancy Tax Fund, Southlake Parks Development Corporation and Crime Control and Prevention District to cover indirect costs that have been borne by the General Fund. This revenue is recognized below the line, meaning it is not shown as a revenue line item. However, these funds are available for operating expenses. The transfers will provide for total available revenue of $35,565,366, an increase of $2,335,517 or 7.0% over the FY 2012 Adopted Budget. General Fund Expenditure Highlights Highlight Item Expenditure Service Enhancement: DPS North Personnel 12 Firefighters and related equipment Cost of Living Adjustment Texas Municipal Retirement System Health Insurance DPS Office Assistant (previously frozen in FY 2010) Human Resources Analyst (previously frozen in FY 2010) $960,000 2% for all employees.43% rate increase 3.5% rate increase $43,248 $63,433 Park Supervisor $75,666 Volunteer Coordinator (Part-Time) $37,026 Expenditure highlights. The General Fund accounts for all expenditure activity not specifically accounted for in other funds, such as operational expenses associated with public safety, engineering, planning, and finance administration. The following describes expenditure highlights for this fund. Service Enhancement: DPS North The City of Southlake has worked with the Southlake Crime Control and Prevention District Board of Directors to allocate funding for construction of a Department of Public Safety station called DPS North in the northern part of the City. This facility will serve as a fire station and police/ fire training center. The construction of DPS North represents a significant service enhancement for Southlake residents. Construction began in the third quarter of FY 2012 and is slated for completion towards the end of FY Once open, 19

10 Financial Information & Fund Summaries - General Fund DID YOU KNOW? the City s EMS and fire response times will improve significantly for north Southlake which is critically important for patient care, resident safety and minimizing property loss. Once the DPS North Training Facility is operational, the city s Insurance Service Office rating will be reduced, translating into a reduction in home insurance costs on the North side of town. The new station is also a key component of reducing insurance rates. Once open, the City will see a change to its current Insurance Service Office (ISO) rating, with a goal of reducing insurance costs in north Southlake. While the construction costs of the $16.7 million facility will be borne by the Crime Control and Prevention District, operational costs will be paid through the City s General Fund. This is because the life of the District is limited. Proposed General Fund expenditures of $960,000 will ensure that the station is fully operational upon opening. These include personnel costs associated with hiring the twelve firefighters needed, as well as needed equipment. The required fire engine will be funded through the Strategic Initiative Fund described on page 35. This initiative supports the Council s focus area of Safety & Security, and the strategic corporate objective of Achieve the highest standards of safety and security. Personnel The City of Southlake is a service organization; as such, the majority of its expenses are related to labor costs. For FY 2013, over 65% of planned expenses are personnel costs. An explanation of some of these costs is provided below. Compensation and classification. In FY 2007, the City of Southlake implemented a new compensation and classification system, replacing the old pay plan that had been in place since This system reflects the continued philosophy of ensuring a high quality workforce through efficient but competitive compensation practices. In adopting the new compensation plan, the City Council also adopted a strategy of achieving and maintaining a market-competitive compensation position of 103% of the designated weighted market average. This means the midpoints of the various pay grades are established at 103% of the weighted market average salaries for equivalent job classifications in the comparison or benchmark cities. (Note: executive positions are placed at approximately 102% of the market average of total compensation for the position.) Each year, we conduct an annual survey of our benchmark cities for market competitiveness. The market showed this year that we are lagging our desired position in some areas; however, rather than making adjustments at this time, we are proposing to study our pay philosophy and plan during the coming year to determine if the approach is still viable. Recall that we currently use a step and grade system, which we believe should now be replaced. We want to review alternative approaches to ensure that our compensation system is modern and sustainable. If needed, adjustments to our plan can be considered once the study s recommendations are complete. DID YOU KNOW? The proposed budget for FY 2013 incorporates a tax rate of $ per $100 valuation, which holds the tax rate steady for the tenth straight year. 20

11 Financial Information & Fund Summaries - General Fund For FY 2013, the proposal contained within the budget is to provide city employees with a cost of living adjustment of 2%. We have surveyed other cities in our market and have determined that many plan to offer adjustments in the 2-5% range. We are comfortable with 2% since we will review the overall plan. Benefits. The summaries below describe the major benefits and our approach to providing them in FY DID YOU KNOW? There are no service reductions in the FY 2013 Proposed Budget. In fact, the budget includes funding to open DPS North, an important service enhancement. Texas Municipal Retirement System (TMRS). TMRS is a statewide agent multiple-employer public employee retirement system created by law in 1947 to provide retirement, disability, and death benefits to employees of participating cities. As of December 31, 2011, 847 municipalities in Texas have a retirement benefit plan administered by TMRS, including the City of Southlake. During the 82 nd Texas Legislative Session, Senate Bill 350 passed relating to the restructuring of fund obligations and accounts of TMRS. S.B. 350 authorized TMRS to combine three internal fund accounts into a single fund account called the Benefit Accumulation Fund. The new fund structure resembles the fund structure common to the vast majority of public retirement systems. As a result of the passage of S.B. 350, the City s contribution rate decreased in FY 2012 by 1.55%. For FY 2013, the City s contribution rate will increase by 0.43%. This continues to be lower than the City s contribution rate prior to the account restructuring mentioned above. For FY 2013, no plan changes are proposed. We will be able to continue to offer all the features previously approved, important because TMRS benefits are our highest priority recruitment and retention tool. Health insurance. The City recently entered into a renewal agreement for health insurance. Through negotiation, Aetna s proposed rate increase dropped from 14.1% to 3.5% with no plan modifications. Although the renewal included a rate increase, it allowed for employee medical-out-of pocket expenses to remain stable for the first time in two years. Providing a competitive health insurance plan is a significant factor in attracting quality candidates and retaining valuable employees. Compensation and benefit strategy are tied to the City s strategic corporate objective of Attract, develop and retain a skilled workforce. Staff positions. In FY 2010, six existing positions were frozen or not funded as a result of decreases in City revenue that resulted from the economic downturn. These positions have been routinely evaluated for reinstatement since that time as economic conditions have improved. For FY 2013, we are proposing that the following frozen positions be funded: DPS Office Assistant. DPS currently has one Administrative Secretary to support the Police Chief and Fire Chief as well as perform other administrative duties. Additionally, assistance is needed in the records office and, on occasion, in the property room. The funding of this position will not only result in adequate support for DPS professionals, it will also result in better coverage of DPS offices with adequate staffing. The cost of reinstating this position is $43,248, including salary and benefits. 21

12 Financial Information & Fund Summaries - General Fund HR Analyst. The HR Analyst position is critical for effectively addressing safety initiatives and succession planning. Much of this individual s time will be spent coordinating training programs, and developing and monitoring health and safety trends. Since this position was frozen, the City has experienced a 20% increase in worker s compensation rates due to claims. The Human Resources Department needs to fill this position to round out its staffing to meet the needs of the City s employee population. The cost of this position is $63,433. The FY 2013 budget also proposes funding for one additional full-time position, a Park Supervisor, and one additional part-time Volunteer Coordinator. Park Supervisor. The Park Supervisor is proposed due to the significant expansion and improvement of the City s park system and public spaces. These spaces are maintained through a combination of in-house crews and maintenance contracts that require supervisory oversight. This supervisor, along with the other two park supervisors, will oversee the maintenance of a developed park system, medians, roundabouts, and right of way that has increased maintenance responsibilities by almost 200 acres (82%) since Salary and benefit requirements for this proposed position are $75,666. Volunteer Coordinator (part-time). The Volunteer Coordinator position is proposed as a part-time staff member whose duties will be to manage the centralized portion of our volunteer program. This staff member will be responsible for advancing the City s volunteer program by proactively recruiting, training and tracking volunteers while also working with City departments to ensure the best utilization of volunteers across programs. We want to provide a positive experience for all those who volunteer with the City. This position will also answer administrative needs of the program by completing job descriptions for all positions, completing a volunteer manual and developing an online orientation program. This position directly addresses the City s focus area of Volunteerism. The cost of this position is $37,026. Fund balance. The City of Southlake fund balance policy adopted in 1993 states that the: goal shall be to maintain a fund balance in the General Fund equal to a minimum of 15% of General Fund-budgeted operating expenditures, with the optimum goal of 25%. The proposed budget reflects an undesignated General Fund balance of 25.64% of expenditures, which represents $8,645,908. This ending balance is set aside to provide funding in the event of an unanticipated economic downturn or emergency. The 25.64% represents the optimal balance as required by the City s policy. This level is sufficient to ensure the General Fund s financial integrity. We typically set aside excess revenue and unallocated appropriation (above 25%) for critical, high-impact projects as a transfer to the Strategic Initiative Fund and will continue this practice in FY Maintaining a fund balance at the optimal level designated in the policy addresses the focus area of High Performance Management and the strategic corporate objective of Achieve fiscal wellness standards. 22

13 Financial Information & Fund Summaries - Debt Service Fund Debt Service Fund This fund accumulates ad valorem tax dollars to pay for the annual portion of tax-supported debt. Bonds are issued for capital projects, including public works infrastructure, parks, and facilities, for example. The debt service tax rate for FY 2013 will be $0.12, down $0.01 from FY Staff analysis has shown this tax rate to be sufficient for covering existing General Fund debt, as well as for future annual bond programs. For FY 2013, revenues are estimated at $6,476,445 with $6,431,445 coming from ad valorem taxes and $45,000 from interest income. Transfers into the fund are budgeted at $5,847,353 from the TIF Fund, Storm Water Utility District, and Crime Control and Prevention District to pay the debt service for the bonds issued on the Districts behalf. Total expenditures are proposed at $12,588,418 for annual principal and interest payments, as well as related administrative costs. The debt service fund will end the year with undesignated reserves of $10,968,195. This allows us to meet the requirement of our fund balance policy which states that the City of Southlake shall also maintain Reserve Funds for all statutorily required reserve funds to guarantee debt service. DID YOU KNOW? To read more about the City s debt management strategy, see the Debt Service Funds section on page 215. The capital projects funded through the City s bond program address the focus areas of Infrastructure and Mobility, and the strategic corporate objective of Invest to provide and maintain high quality public assets. 69% of the total FY 2013 debt service is self-supporting. This type of debt is funded by revenue sources other than the ad valorem tax, such as the Southlake Parks Development Corporation halfcent sales tax approved by voters in

14 Financial Information & Fund Summaries - Utility Fund Utility Fund Utility Fund Expenditure Highlights The Utility Fund, also known as the Water and Sewer Enterprise Fund, is used to account for the acquisition, operation and maintenance of Southlake s municipal water and sewer utility, supported primarily by user charges to utility customers. The fund accounts for operational costs as well as debt service for utility system improvement bonds. The intent of this fund is for the direct beneficiaries to pay for all costs of the fund including debt service through fees levied for the services provided. Utility Fund dollars are not used to pay for general operations of the City. Revenue Highlights. The Utility Fund revenues are projected at $20,855,500 for an increase of $1,581,250. This is a an 8.2% increase when compared with the FY 2012 Adopted Budget. Expenditure Highlights. Personnel The Utility Fund includes funding for the employees needed to manage and operate Highlight Item Expenditure Personnel Equipment Facility Improvements at Public Works Operations Center Cost of Living Adjustment Health Insurance the City s utility system. The cost of living adjustment previously described on pages 20-21, as well as adjustments to health insurance costs will be applicable to Utility Fund employees as well. No new full-time employees are requested, although we have added hours to the budget to provide for a part-time intern to assist with communication efforts on water conservation and other utility topics. Other highlights Funding has been requested for equipment and facility improvements. Items shown below are specifically related to providing water, sewer and/or solid waste service. Security lighting & cameras at Public Works Operations Center $ 19,220 Public Works Operations Center exterior painting $ 35,000 Sewer camera $ 70,000 Radio upgrade for elevated tanks $ 35,000 Vac truck for water excavating $350,000 Total expenditures in the Utility Fund are proposed at $20,265,189, a 5.6% increase over the FY 2012 Adopted Budget. Indirect charge/transfers. We have budgeted a transfer of $836,220 from the Utility Fund to the General Fund to cover indirect expenses and for payment of a franchise fee related to solid waste services. Fund balance. The proposed Utility Fund budget provides 164 days of working capital, or stated differently, a 45% fund balance. This exceeds the City s fund balance policy for the Utility Fund, which states that the goal shall be to maintain a fund balance of 60 days of working capital in the Utility Fund with the optimum goal of 90 days of working capital. Items proposed for the FY 2013 Utility Fund budget address the focus area of Infrastructure. 2% for all employees 3.5% rate increase Sewer camera $70,000 Radio upgrade for elevated tanks Vac truck for water excavating Security lighting and cameras $35,000 $350,000 $19,220 Exterior painting $35,000 24

15 Financial Information & Fund Summaries - Vehicle Replacement Vehicle Replacement Fund The Vehicle Replacement Fund accounts for the resources needed to manage the purchase of vehicles for the City s fleet. The establishment and funding of the vehicle replacement program was designed to even out expenses for the City s fleet from year to year, and provides a Vehicle Replacement Fund Expenditure Highlights Highlight Item Expenditure Equipment Fleet replacement per schedule logical method for purchasing and retiring vehicles. A five-year purchase plan has been developed to detail future capital investment needs. Revenue highlights. For FY 2013, we are planning a transfer from the General Fund to the Vehicle Replacement Fund of $200,000. Expenditure highlights. Expenditures are estimated at $950,000 to replace aging vehicles coming off-line. $950,000 Fund balance. The projected ending fund balance is approximately $2.2 million, which provides adequate reserves for the program. The establishment and use of the Vehicle Replacement Fund supports one of the City s financial stewardship objectives, Invest to provide and maintain high quality public assets. DID YOU KNOW? Forty-five percent of City vehicles are used for Police and Fire Services. 25

16 Financial Information & Fund Summaries - SPDC Southlake Parks Development Corporation Fund The Southlake Parks Development Corporation (SPDC), a citizen-approved development corporation established to develop and operate park and recreational facilities, uses a half-cent sales tax for all uses permitted by State law. The operating fund is used to finance, develop and operate park and recreation facilities, while the debt service fund is used to account for the accumulation of financial resources for payment of long-term principle and interest costs for SPDC improvements. The uses of this fund are restricted to those allowed by law and approved by the Board of Directors. While the SPDC budget can and should be used to support operational costs associated with the improvements funded, these funds may not be used to support the general operations of the City. A five-year capital improvements program has been established to support the implementation of the City of Southlake s Park, Recreation and Open Space Master Plan as well as the Trail System Master Plan. Capital Improvements Program (CIP) priorities are established as a joint effort between the Park and Recreation Board, Southlake Park Development Corporation Board of Directors and City Council. SPDC Fund Expenditure Highlights Highlight Item Expenditure Personnel Equipment Construction Manager (1/2 salary and benefits) Cost of Living Adjustment Grounds Master mower $51,091 2% for all employees $60,000 Line Painter $13,000 Two mowers $28,000 Two utility vehicles $29,000 The Southlake Parks Development Corporation Board of Directors is committed to implementing priority projects identified in the master plans. On June 12, 2012 the City Council, Southlake Parks Development Corporation Board of Directors and the Southlake Parks Operations and Recreation Board members met in joint session to discuss the financial performance of the Corporation, review master plan implementation to date, and identify priorities for the FY CIP. This priority listing was used to fit projects into the plan based on funding availability. Vacuum excavator $23,000 Grant consultant $35,000 Bob Jones Park Road Overlay $40,000 Please see page 257 of this document to review the FY CIP including the Southlake Park Development Corporation plan. Revenue highlights. The SPDC operating fund is projected to receive $5,000,000 in sales tax revenue, $153,816 in rental income, and $7,500 in interest earnings for total projected FY 2013 revenues of $5,161,316. This represents an 11% increase over FY 2012 Adopted Budget. 26

17 Financial Information & Fund Summaries - SPDC Expenditure highlights. Total expenditures for the operating fund are proposed at $446,091. This is a 25% increase from FY 2012 Adopted Budget. The Southlake Parks Development Corporation Board of Directors approved the proposed operating budget on August 7, Personnel SPDC funds a portion of the salary and benefits for the City s Construction Manager. All compensation and benefit adjustments previously mentioned will apply for this employee. DID YOU KNOW? Since its inception in 1994, the SPDC Fund has collected over $50 million for park projects such as the Bicentennial Park renovations and the acquisition and development of Bob Jones Park. Other highlights The SPDC operating budget includes funds for the purchase of new and replacement equipment required to maintain the ongoing expansion of the City s park system. A new mower and line painter, replacement mowers and replacement utility vehicles, as well as a vacuum excavator is needed for the efficient maintenance of the parks. The new equipment will cost $153,000. Indirect charge/transfers. A transfer of $206,453 to the General Fund is planned for indirect charges. We have also budgeted a transfer of $1,000,000 to the CIP as well as a $3,089,980 transfer to the SPDC Debt Service Fund. Fund balance. The proposed ending fund balance for the SPDC operating fund will be $6,363,388. Initiatives funded through the Southlake Park Development Corporation address the focus area of Infrastructure and the strategic corporate objective of Provide attractive and unique spaces for enjoyment of personal interests. 27

18 Financial Information & Fund Summaries - CCPD Crime Control and Prevention District Fund The half-cent sales tax collection to fund the Crime Control and Prevention District (CCPD) began in April 1998, with the first sales tax check received in June State law provides that a district s life is limited to five years, unless voters continue the district by approval of a referendum. In February 2002, Southlake voters approved the continuation of the CCPD for 15 years. The use of District funds are defined by State law. The primary use of the funds is for one-time, non-recurring expenses related to police facilities. Operational expenses are limited since the District will sunset in CCPD Fund Expenditure Highlights Highlight Item Expenditure Personnel Equipment Construction Manager (1/2 salary and benefits) Cost of Living Adjustment Mandatory radio system upgrade $50,530 2% for all employees $981,725 Please see page 257 of this document to review the FY Capital Improvements Program (CIP) including the CCPD plan. Revenue highlights. For FY 2013, $4,950,000 is anticipated in sales tax collections for the District, along with $13,500 in interest income for total revenues of $4,963,500. This is a projected increase of 12.3% over the FY 2012 Adopted Budget. Expenditure highlights. Total operating expenditures are proposed at $1,066,255 for FY Planned expenses for the operating budget have been approved for funding by the Southlake Crime Control and Prevention District Board of Directors. For FY 2013 the District will fund 50% of the salary of the City s Construction Manager who is taking on responsibilities related to the construction of DPS North. The largest new expense in the operating budget is for a mandatory radio system upgrade at a cost of $981,725. Indirect charge/transfers. A transfer of $198,540 to the General Fund is planned for an indirect charge. Additionally, a debt service transfer of $1,978,200 is also planned as well as a $3,000,000 transfer to the CIP to cash fund a portion of the North DPS construction costs. DID YOU KNOW? Thanks to CCPD sales tax dollars, 71% of the DPS Headquarters construction expenses were paid with cash. The remainder was funded with 6-year bonds, the last of which will be paid off in Fund balance. The ending fund balance for the CCPD Operating Fund is projected at $3,960,625. The activity of the Southlake Crime Control and Prevention District supports the focus area of Safety & Security and the strategic corporate objective of Achieve the highest standards of safety and security. 28

19 Financial Information & Fund Summaries - TIF Tax Increment Financing District Fund Tax Increment Reinvestment Zone #1 (TIRZ #1) or the Tax Increment Finance (TIF) District was created in 1997, with an effective beginning date of January 1, 1998 to encourage quality commercial development in the City. Incremental values within the zone subsequent to January 1997 are taxed at the City s tax rate of $.462 per $100 Highlight Transfer Item Debt service Expenditure $3,674,759 of assessed value; however, 100% of the ad valorem revenues are utilized within the Zone or District, rather than being allocated to the City s overall budget. Overlapping taxing entities, including Tarrant County, Tarrant County College District, Tarrant County Hospital District, and the Carroll Independent School District have agreed to participate at varying levels in the TIF District by assigning their ad valorem tax dollars as well. The use of these funds is restricted. They are primarily used for paying the debt for infrastructure improvements in TIRZ #1 and are not available for any operational purposes. The projects funded have been identified in the TIRZ #1 Project & Financing Plan, adopted by the Board of Directors in August Revenue highlights. The incremental value assigned to TIRZ #1 for the 2012 tax year is $290,288,909, which is a 3.5% increase from the valuation for This translates into anticipated ad valorem revenues for the TIF Fund of $6,826,533. With interest, total revenues are anticipated to be $6,835,033. Revenue projections include estimated CISD payments based on a two year average. Indirect charge/transfers. A transfer to the debt service fund in the amount of $3,674,759 is budgeted to fund the debt repayment for bonds issued for TIRZ #1 projects. Fund balance. The ending balance for this fund is projected at $4,725,546. The use of tax increment financing supports the focus area of Quality Development. TIF District Expenditure Highlights DID YOU KNOW? Since its implementation in 1998, TIRZ #1 has generated over $55 million in revenue for investment, and to further the economic development goals of the Zone. These funds have been used for numerous public infrastructure projects such as the construction of Town Hall as well as the development of parks within the Zone. 29

20 Financial Information & Fund Summaries - Special Revenue Special Revenue Funds The City of Southlake accounts for revenues and expenditures of dedicated or special purpose funding, in a number of special revenue funds as described below. Bicentennial Concession The proposed budget includes this special revenue fund to account for revenues and expenditures dedicated for Bicentennial Park use. These funds were derived from a contract with Coca-Cola, with uses restricted as specified by the contract. The proposed budget reflects no revenues for FY 2013 because the contract has expired. No expenses are budgeted. The proposed budget anticipates an ending fund balance of $37,675. Court Security This proposed budget includes funds from the payment of fines and forfeitures. Use of these funds is restricted for court security items, per State law. The proposed budget anticipates revenues of $32,000. The beginning fund balance is $425,361. Proposed expenditures of $62,155 are planned to enhance the overall safety of the court with the use of security personnel. The projected ending fund balance is $395,206. Bicentennial Concession Special Revenue Funds Expenditure Highlights Fund Item Expenditure Court Security No planned expenditures. Court Technology The proposed budget includes funds from the payment of fines and forfeitures. Uses of these funds are restricted, per State Public Art Fund Recycling Fund Future public art Leaf Recycling Program $100,000 $23,000 law. The proposed budget anticipates revenues of $41,000. Proposed expenditures of $36,400 are planned including funding for a software upgrade. Funds are also included to allow dispatchers to confirm warrants instantly. The projected ending fund balance is $306,625. Facility Maintenance Fund The Strategic Initiative Fund (SIF) has provided seed money for this fund, an important element of our budget given the size and complexity of the City s facility infrastructure. For FY 2013 we will continue our practice of transferring SIF money into this fund, but we are also beginning to budget expenses in the operating budget n/a Court safety $62,155 Personnel - Cost of Living Adjustment 2% for all employees Court Technology Software upgrade $13,500 Facility Maintenance Fund Hotel Occupancy Tax Library Donations Park Dedication Fees Town Hall maintenance $114,000 Personnel - Cost of Living Adjustment Wayfinding Plan Implementation (Phase III) Cooperative marketing & promotion with the Hilton Hotel Home for the Holidays and Stars & Stripes event and promotion 2% for all employees $50,000 $48,000 $101,000 Informational Kiosks (Phase I) $30,000 Public Art Fund transfer $118,455 Public Relations agency services $20,000 Gateway Church shuttle $6,000 Special projects No planned expenditures. Defined by donor n/a 30

21 Financial Information & Fund Summaries - Special Revenue for facility projects. You will recall that these items were previously budgeted directly in the SIF. In FY 2013 we are proposing a transfer of $400,000 from the Strategic Initiative Fund. The beginning fund balance is $1,522,166. We anticipate interest revenue of $5,000. The City of Southlake currently has over 788,000 square feet of facility infrastructure. Much of the daily maintenance of the facilities is absorbed into the various operating budgets as appropriate. However, for FY 2013 we have budgeted $114,000 for specific projects related to the ongoing maintenance of Town Hall and other projects that may be necessary. Ending fund balance is projected at $1,813,166. Special Revenue Funds Expenditure Expenditure Highlights, Highlights Continued Fund Item Expenditure Red Light Camera Fund Cost of Living Adjustment 2% for all employees Crosswalk installation $5,000 Electronic citation writers (10) $42,010 Cycle Vision DVR (dash cams) $15,900 FM 1709 Traffic Study $55,000 School Zone Flasher Battery Replacement Intersection Improvements (Carroll/Federal) $8,000 $145,000 FM 1709 Signal Battery Back Up $30,000 Hotel Occupancy Tax The Hotel Occupancy Tax is authorized under the Texas Tax Code, Chapter 351. The City of Southlake adopted Ordinance No. 769 in February 2000, levying a 7% tax on room receipts. The tax on rooms at the Hilton Hotel in Town Square is providing the revenues to the City in this category. The first expenditures from this fund were made in FY Use of these funds is restricted. Planned expenses must be authorized under the Texas Tax Code, Chapter 351. Reforestation Fund Storm Water Utility Fund City-wide Beautification Projects $25,000 Annual Street Tree Program $5,000 Tree Maintenance $20,000 Keep Southlake Beautiful Programs Cost of Living Adjustment $3,000 2% for all Employees Hydrojetter and trailer $95,000 Digitize storm water assets $15,000 For FY 2013, revenues are estimated at $789,700. The operating budget includes funding for the Marketing and Tourism Coordinator, as well as a portion of the cost of the Economic Development/Tourism Director and administrative support staff costs directly attributable to tourism. Highlights of planned Hotel Occupancy Tax project expenditures for FY 2013 include the following: Wayfinding Plan Implementation (Phase III) $ 50,000 Cooperative marketing & promotion with the Hilton Hotel $ 48,000 Home for the Holidays and Stars & Stripes events and promotion $101,000 31

22 Financial Information & Fund Summaries - Special Revenue Informational Kiosks (Phase I) $ 30,000 Public Art Fund transfer $118,455 Public Relations agency services $ 20,000 Gateway Church shuttle $ 6,000 These expenses will complement our existing event marketing and advertising efforts. Total planned expenditures for this fund for FY 2013 are $646,159. The indirect transfer for the General Fund is projected at $31,588. The budget also proposes a transfer of $118,455 to the Public Art Fund. The ending fund balance is projected at $1,147,846. This balance will carry forward for future initiatives to promote tourism in the City of Southlake. Library Donations This proposed budget includes funds from donations and uses are restricted for library purposes. The proposed budget anticipates a beginning fund balance of $5,833. Staff is anticipating approximately $6,000 in donations and the expenditures will be for special projects, which are often defined by the donor. Ending fund balance is projected at $6,383. Park Dedication Fees This special revenue fund accounts for funds from dedication fees on new development. Use of park dedication fees is restricted to park improvements, and primarily used for capital expenses. The proposed budget reflects revenues of $30,000 in fees and $1,500 in interest earnings for total revenue $31,500. The proposed budget anticipates a beginning fund balance of $133,384. For FY 2013, no projects are proposed for this fund. The ending fund balance is projected to be $164,884. DID YOU KNOW? Using a combination of project and Public Art funds, sculptures were installed during the past year at all four of the City s roundabouts. Public Art Fund The Public Art Fund was established for the promotion, creation, and/or installation of public art throughout the City of Southlake. Funding was first established when the Southlake Stampede program was implemented the proceeds from the sale of the steers were designated for public art. Additional funding is now available from the Hotel Occupancy Tax to support the City s public art program. The Southlake Arts Council and City Council have adopted a master plan to guide the City s art program. For FY 2013, the public art operating fund will support the City s ongoing relationship with the APEX Arts League, Arts Council Northeast, and the Southlake Arts Council and will provide funding for various projects such as public art displays and event support. The proposed budget shows $1,000 in interest income based on a beginning fund balance of $236,703. The law providing for the Hotel Occupancy Tax allows up to 15% of the revenues to be used for public art purposes. Because this source of funding comes in the form of a transfer, it is shown below the line. For FY 2013 the transfer is estimated at $118,455. The ending fund balance for the public art fund is estimated at $214,158. Recycling Fund The City s contract for solid waste services provides for an annual payment to the City of $6,000 for total projected revenues of $6,500 including interest. Note that the beginning fund balance is $23,661. The proposed budget includes expenditures of $23,000 for the cost of the annual curbside leaf recycling program. The ending fund balance is $7,

23 Financial Information & Fund Summaries - Special Revenue Red Light Camera Fund - In August 2008, the City of Southlake initiated a camera system for red light violation enforcement. This is a traffic safety program in which the City uses a state-ofthe-art digital camera and violation detection system installed at intersections for the purpose of decreasing the number of red light violations, reducing serious vehicle collisions, and minimizing officer risk. DID YOU KNOW? Per State law, Red Light Camera funds may only be used on traffic safety related items. The City of Southlake collects approximately 50% of the gross revenue generated from the violations issued and collected upon as a result of the program. The City is required to remit 50% of the gross revenue to the State, excluding program expenditures. Funds collected by the City of Southlake must be used for traffic safety programs. Projected revenue for FY 2013 includes $1,038,872 in fines and forfeitures, and $2,500 interest income for total revenue of $1,041,372. For FY 2013, we are proposing the use of these funds for the following traffic safety projects, which directly address the City s Safety and Security Focus Area. Crosswalk installation $ 5,000 Electronic citation writers (10) $ 42,010 Cycle Vision DVR (dash cams) $ 15,900 FM 1709 Traffic Study $ 55,000 School Zone Flasher Battery Replacement $ 8,000 Intersection Improvements (Carroll/Federal) $145,000 FM 1709 Signal Battery Back Up $ 30,000 The beginning fund balance for the Red Light Camera Fund is $696,080. Ending fund balance for FY 2013 is projected at $697,766. Reforestation The proposed budget includes the special revenue fund to account for revenues and expenditures dedicated for reforestation. These funds are derived from assessments related to the tree preservation ordinance and policies. The proposed budget reflects permits/fees of $5,000 and interest income of $500 for total revenue of $5,500. It anticipates a beginning fund balance of $116,753. Expenditures are budgeted at $53,000 for FY For FY 2013, funds are allocated for beautification projects in the City ($25,000). The plan is to identify areas within the City that could benefit from targeted beautification efforts, and staff will work with Council to prioritize these areas for attention. Per our normal practice, we have also budgeted funds for the street tree program ($5,000) and tree maintenance ($20,000). The activities supported by the Reforestation Fund support the Council s desire for quality development by ensuring that the natural environment is protected and preserved, where possible, or at a minimum replaced. The ending fund balance is projected at $69,253. Storm Water Utility Fund - On October 17, 2006, the City Council established a Storm Water Utility System. This utility requires a monthly fee for all of Southlake s developed properties. These fees provide a funding source for maintenance, repair, and construction of storm water facilities, and can only be spent for these purposes. The monthly storm water fee 33

24 Financial Information & Fund Summaries - Special Revenue is the same for all residential dwelling units. Residential properties are charged $8 per month for each dwelling unit that is on the property. Fees for non-residential properties are calculated individually in proportion to each property s storm water runoff potential. For FY 2013, total revenues for this fund are projected at $1,293,500 including $8,500 in interest earnings. This is an increase of 2.0% over the FY 2012 Adopted Budget. Planned expenditures for FY 2013 total $596,425, including $99,667 in personnel expenses, $401,758 in operational costs, and $95,000 in capital costs. These costs include a storm water engineer (funded first in FY 2009), contract engineering services (surveying, etc.), contract labor for drainage projects, a limited street sweeping program, and materials all budgeted to ensure that we are able to adequately address identified localized drainage issues. For FY 2013, we are requesting a hydrojetter and trailer for a cost of $95,000. We are also asking for funds to digitize ($15,000) the City s storm water assets. The budget shows a decrease of 14.4% from the FY 2012 Adopted Budget expenditures. A transfer to the Debt Service Fund of $194,394 is planned for debt service, $51,740 to General Fund for indirect charges, and a $350,000 transfer to the CIP for drainage projects. The ending fund balance is projected at $2,170,151. The expenses are necessary to improve and maintain drainage ways throughout the City. 34

25 Financial Information & Fund Summaries - SIF Strategic Initiative Fund At the end of each fiscal year, excess revenue and unspent appropriation become a part of the City s fund balance, or reserves. This year s budget proposes $8,645,908 of current projected revenues will remain in the General Fund undesignated fund balance. This will provide for reserves of 25.64% of operating expenses to be used for unanticipated or emergency needs. This is the level deemed optimal under the City s fund balance policy. Using excess reserves in this way provides cash funding for certain needed projects without requiring the City to borrow money for them. Further, this approach ensures that reserves are not used to balance the City s operating budget. Use of these funds is limited to one-time, nonrecurring expenses. Strategic Initiative Fund Expenditure Highlights Highlight Item Expenditure Infrastructure Maintenance Community Enhancement Transfer to Facility Maintenance Fund Town Square Public Space Enhancement Projects Wayfinding Signage $400,000 $250,000 $50, Plan $30,000 Implemented in 2006, the Strategic Initiative Fund (SIF) has been used for infrastructure maintenance (City facility repairs and renovations), the Urban Design Study, technology needs, and capital projects such as roads and sidewalks. We have also been able to purchase needed public safety equipment such as a fire ladder truck, an ambulance, and a portion of the outdoor warning system. This fund has been a valuable tool for funding high impact projects. Figure 10 (next page) shows the uses of the Strategic Initiative Fund since its inception. For FY 2013, we are proposing a transfer from the General Fund to the SIF of $1,300,000. The beginning SIF fund balance is $6,386,822. For FY 2013, the following projects are proposed: Infrastructure Maintenance Funding - With current assets exceeding 788,000 square feet, a preventative maintenance and repair program will be critical for proper facility management. Recall that you funded a facilities manager in FY 2007 to oversee the program. Capital Acquisition Technology Infrastructure Bond Election Public Information Communication Fire Engine and related equipment (DPS North) Five Lifepack 15 ECG Monitors $20,000 $900,000 $207,000 Menzi Muck $308,000 CIP Transfer $3,000,000 Council Chambers Video / Equipment replacement $190,000 We are proposing that $400,000 be set aside in the Facility Maintenance Fund, shown in the budget as a transfer. The purpose of this fund is to build capacity for future maintenance projects as we will have many needs to address as our facilities age. See page 244 for details related to the Facility Maintenance Fund. 35

26 Financial Information & Fund Summaries - SIF This is a proactive initiative designed to build a reserve for the future maintenance of our facility investments. Community Enhancement Funding - This category of funding is set aside as a way to provide pay-as-you-go funding for initiatives which will enhance the quality of life or aesthetics of Southlake. For FY 2013, community enhancement projects include: Town Square Public Space Enhancement Projects $250,000 Wayfinding Plan Implementation (Phase III) $ 50, Plan $ 30,000 Bond Election Public Information Communication $ 20,000 Capital Acquisition Funding - The Strategic Initiative Fund is often used to provide cash funding for capital equipment or projects. For FY 2013 we are proposing to transfer $3 million from the SIF to the Capital Improvements Program (CIP) for the purpose of building a reserve for a future multipurpose facility. Note that the five year CIP shows additional funding through SPDC for this purpose. The allocation of these funds over the next three years, added to the $7.5 million already set aside for this purpose, will provide $13.5 million by the conclusion of FY This portion of the SIF also includes funds to purchase the fire engine and related equipment for DPS North ($900,000). Additionally, we propose the purchase of five Lifepak 15 ECG monitors for $207,000. Finally, we propose replacing the Menzi Muck, a large piece of equipment used for cleaning creeks and clearing drainage ways, for $308,000. Technology Infrastructure - Funds have been set aside in this category to replace aging video equipment in the Council Chambers that is no longer supported. This upgrade will result in more reliable equipment and higher quality outputs. The cost of this upgrade is $190,000. The total proposed allocation for the Strategic Initiative Fund for FY 2013 is $4,815,000. This leaves $2,339,822 or 30% of the available funds unallocated. Figure 11 (next page) shows SIF funds by category for FY Figure 10: Strategic Initiative Fund Expenditures by Type, FY

27 Financial Information & Fund Summaries - SIF Figure 11: Strategic Initiative Fund Expenses by Category, FY 2013 DID YOU KNOW? The Strategic Initiative Fund has transferred over $18.5 million to the CIP since 2006, allowing the City to avoid borrowing money to fund numerous capital projects. 37

28 Financial Information & Fund Summaries - CIP Capital Improvements Program FY 2013 Capital Budget The proposed FY FY 2017 Capital Improvements Program (CIP) also is submitted for City Council s consideration. The CIP coincides with the City of Southlake Strategy Map because the projects included provide travel convenience within the city and region (C2), and provide attractive and unique spaces for enjoyment of personal interests (C3). The CIP is also an investment of City dollars to provide and maintain high quality public assets (F2). The CIP establishes a five (5) year funding schedule for the purchase, construction or replacement of physical assets of the City. Capital improvements typically have a useful life of over ten years and value greater than $10,000. The first year (FY 2013) of the Capital Improvements Program is called the Capital Budget, and is appropriated in the same manner as the annual operating budget. Funds for projects are appropriated on an annual basis. Projects approved for subsequent years (FY FY 2017) are approved for planning purposes only and do not receive expenditure authority until they are part of the Capital Budget. The CIP Technical Committee, which is comprised of the Assistant City Managers and Department Directors, began the process of evaluating CIP project requests in April of The process began in April to allow the CIP to be developed in time to be reviewed in conjunction with the annual budget. By reviewing the CIP in conjunction with the budget, City Council will be able to evaluate capital and operational needs as part of overall budget considerations. The review of CIP projects by the Technical Committee involved the following: First, the CIP request forms are distributed to the appropriate departments. The request forms are completed by the responsible departments and submitted to the CIP Technical Committee. The CIP Technical Committee then begins the process of evaluating the various CIP project requests. The Technical Committee s role includes: 1. Reviewing the CIP project requests for accuracy. 2. Determining if projects can be consolidated in order to reduce project costs. 3. Scoring each CIP project request based on a standardized form. Once scored, the CIP project was ranked in the appropriate funding category (i.e., General Fund, Utility Fund, Storm Water Utility Fund, Impact Fee Fund, SPDC Fund, or the Crime Control and Prevention Fund) based on the score Fund FY 2013 Capital Budget General Fund $7,500 Utility Fund $2,550 Roadway Impact Fee Fund $125 Sanitary Sewer Impact Fee $113 Water Impact Fee $183 Storm Water Utility System Fund $350 Crime Control & Prevention District Fund $9,016 Southlake Parks Development Corporation $1,000 TOTAL: $20,837 Funding is represented in thousands of dollars (000s). Example: 3,776 = $3,776,000 38

29 Financial Information & Fund Summaries - CIP Figure 12: Capital Improvements Program (CIP) Development and Approval Process received. The resulting ranked project list was then reviewed by the Technical Committee to ensure that there were no obvious flaws in the ranking system. The Technical Committee then reviewed the dollar amount available in each of the fund categories for each of the next five fiscal years and recommended projects to be funded in FY 2013 and the other four out-years, FY 2014 to FY Recommended projects were then reviewed by the City Manager s Office. The CIP development and approval process is illustrated graphically as Figure 12 (above). The FY 2012 capital budget included projects totaling over $21 million from all funding sources, including a variety of roadway, water, sewer, trail, park and storm water projects. A status report of our progress on these projects can be found on the City s website at /cityconstruction. As you will see, these projects are in various stages of planning, design, right of way acquisition, and/or funding. Our work on many of these projects will continue into FY For FY 2013, we have developed a new capital budget that we are proposing for funding which totals just over $20.8 million (all funds). A detailed listing of projects, with prior year funding, future funding requirements and a description of the project is included in this document beginning on page 257. Note that this form also indicates when the project has multiple sources of funding and the associated projected operating costs. General Fund projects for FY 2013 include the following. Note that both capital and annual estimated operating costs are included in the chart in the CIP section of this book. FM 1938 Phase II widening $ 500,000 North Kimball Avenue (Phase II) $1,000,000 Street Rehabilitation Participation Program with Tarrant County $ 150,000 39

30 Financial Information & Fund Summaries - CIP Citywide pathway improvements $ 400,000 Multipurpose facility set aside $3,000,000 Pavement Management Application $ 800,000 Nolen Drive connector $ 150,000 Traffic signal at Watermere and FM 1709 $ 250,000 Dove at Peytonville/Sam School Road intersection improvements $ 250,000 North White Chapel from Emerald to Highland $1,000,000 Utility Fund projects for FY 2013 include the following. Note that both capital and annual estimated operating costs are included in the chart in the CIP section of this book. Sanitary sewer system rehabilitation $ 250,000 Dove Estates lift station improvements $ 100, inch water line from Randol Mill Bend to FM 1709 $ 500,000 Land purchase for water infrastructure $ 750,000 Automatic pressure compensating valves $ 250, inch water line on Shady Oaks from Highland Street to W. Dove $ 500, Agreement incentives (Forest Park Medical Center) $ 200,000 The capital budgets for many of the special CIP funds, such as impact fee funds, provide supplemental funding for general fund or utility fund projects. The Crime Control and Prevention District (CCPD) Board approved two projects for funding in FY 2013: DPS North Training Facility $8,016,000 DPS West Reconfiguration $1,000,000 The Southlake Parks Development Corporation (SPDC) capital budget will be primarily allocated to the implementation of master plan projects, as prioritized by the Southlake Park & Recreation Board, the Southlake Park Development Board of Directors and the City Council at a special workshop held in August. The priority project funded in the FY 2013 Capital Budget includes: Multipurpose Community Facility $1,000,000 Finally, the Storm Water Utility Fund capital budget includes funding for: South White Chapel Bridge at Bear Creek scour mitigation $ 150,000 Zena Rucker Road box culvert at BB6 Creek $ 200,000 Figure 13 (next page) shows how the FY 2013 Capital Budget is allocated by type. The five-year plan does not address all identified projects. There are approximately $28.6 million in needed projects that are shown as unfunded in this CIP. The CIP addresses the focus areas of Infrastructure and Mobility. 40

31 Summary Figure 13: FY 2013 Capital Improvements Program - Allocation by Project Type Summary The FY 2013 budget is a strong plan for Southlake s future. We are committed to responsible financial management and exceptional service delivery. The expansion of services offered with this budget have been accomplished seamlessly because of the City s economic stability and strong financial position. I look forward to working with the City Council to accomplish the strategic goals and critical business outcomes identified in the budget. Respectfully submitted, Shana K. Yelverton City Manager 41

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